the market. This also triggered investors to question the sky-high valuation and dominance of AI bellwethers.
Nvidia is one of the companies most influenced by the recent AI boom. On Monday, its stock price dropped 17%, reducing its market value by $593 billion, setting a record for the company's one-day loss.
Even more so, it all stemmed from a free AI assistant launched by the Chinese company DeepSeek, which uses less data, cutting the costs down to a fraction of the cost of currently available services. The new AI model launched by DeepSeek was called by OpenAI’s CEO, Sam Altman an “impressive model”.
Even more so, Sam Altman also added in a social media post “We will obviously deliver much better models and also it's legit invigorating to have a new competitor!".
When it comes to investors, DeepSeek's popularity seems to have spurred investors to dump tech stock globally, leaving waves from Tokyo to Amsterdam and Silicon Valley. It is also worth mentioning that South Korea and Taiwan markets are closed due to the Lunar New Year, with mainland China being closed until February 4th. The situation left the spotlight on Japanese companies.
Advantest, a chip-testing equipment manufacturer for Nvidia, lost 10% after previously losing almost 9% on Monday. Even more so, Tokyo Electron, a chip-equipment manufacturer as well as SoftBank Group, lost 5%.
Kei Okamura, a portfolio manager from Neuberger Berman, said in a statement referring to the situation of the global market meltdown from August “It's clearly a sell first, ask questions later approach, and we've actually seen that kind of move in the past in Japan,”.
Broadcom finished down by 17.4%, while ChatGPT backer Microsoft fell by 2.1%, and Alphabet, closed down by 4.2%. Moreover, the semiconductor index from Philadelphia, tumbled by 9.2%, being its biggest percentage drop since March 2020, reported Reuters.
.webp)
